Did you know that the number of payment cards in circulation globally is projected to hit 28.44 billion by 2027 compared to 25.85 billion in 2022? Evidently, card payments remain the norm for transactions worldwide, with a vital element contributing to the smooth and safe flow of funds – Acquirer Reference Numbers. These seemingly cryptic codes (more on this below) are integral in the world of online payments, as they can protect both merchants and customers from fraud and other financial mishaps.
In this article, we’re taking you through the concept of Acquirer Reference Numbers, what they mean, how to locate them, what their uses are and how they can benefit your business, thereby ensuring seamless and secure payment processing.
What is an ARN number and how do they work?
ARN stands for Acquirer Reference Number and plays a critical role in the payments landscape. It’s a unique 23-digit number assigned to every Visa and Mastercard card transaction processed online. The first digit of this number will tell you what card scheme was used for the payment – this will be a ‘7’ for Visa, or an ‘8’ or a ‘2’ for Mastercard transactions. Then, the next six to eight digits after this are the acquirer’s Bank Identification Number (BIN). Basically, the ARN number helps trace and reconcile a payment during the payment process.
Once a customer has initiated a payment online, the payment data is securely transferred from the payment gateway to the acquirer. After the acquirer has authenticated the payment, they then encrypt this data and create an ARN number before passing the payment information on to the issuer to authorise. The ARN will then be used to track the payment as it moves through each stage of the payment journey, from authorisation to settlement. While ARNs provide greater oversight of the payment process for merchants, they can also be used to track customer refunds and help resolve chargebacks (more to come on this).
How can ARNs be used to track refunds
Another reason a merchant might want to know an ARN number is if they’re trying to track a refund for a customer for an online payment they’ve initiated with a credit or debit card. Normally, the merchant can pass the payment amount back to the customer on the card they used to perform the original payment. However, there may be instances where this could take more time and the customer may want an update on how much longer they’re expected to wait before they will receive the funds in their bank account. In this instance, the ARN created by the acquirer during authorisation can be used to track the movement of funds within the payment system to the customer’s bank.
How to find your ARN number?
- Log in to your dashboard.
- Go to Payment Transactions.
- Select the Payment Transactions tab.
- Go to Customisable Columns and select ARN under the list of options.
- After applying this change, you’ll now be able to see the ARN for each transaction.
How to use an ARN number to track a refund?
The merchant can send their ARN number to their payment service provider to track a refund. Once the progress of the refund has been confirmed, one of the following status messages will be shared with the merchant:
- ARN is processing – This status message indicates that the refund process is underway, but it’s not yet been completed. In essence, it signals that the refund request is ongoing and the funds are due to be returned to the customer.
- ARN is available – This status text means that the ARN number linked to the refund has been completed and will be provided with the refund details as a reference.
- ARN is unavailable – This status message is applied when the refund process may have started prematurely, even before the initial charge was fully processed by the issuer. In such instances, the merchant’s payment provider may reverse the authorisation and remove the charge entirely. This suggests that the refund is now unnecessary, and there's no need for an ARN number. This status confirms that the refund process didn’t move forward due to the specific circumstance.
The above status messages are vital for merchants to grasp the progress and outcome of refund payments. This, in turn, establishes transparency and clarity in the transaction ecosystem.
What are the benefits of ARNs?
ARNs are an essential component of the online payments landscape and they carry their own set of benefits for merchants. Below we outline some of the most common ones.
- Reduced fraud – By assigning a unique identifier to each transaction, merchants can leverage ARNs to track payments and detect any suspicious transaction activity. As this process can help trace any unauthorised transactions and deter fraudulent payments from being processed, the threat of fraud can be significantly minimised.
- Increased efficiency – ARNs are instrumental in identifying and monitoring transactions. They serve as a distinctive number assigned to each individual transaction, which can help gain visibility of the payment’s journey from the merchant’s business account to the customer’s bank account. This can help reduce the risk of errors and discrepancies.
- Faster dispute resolution – In the case of disputes or chargebacks, ARNs can act as reference points. This means that ARNs can support businesses in providing evidence about the validity of a transaction to address any issues with cardholders and issuers. This can result in faster dispute resolution.
Overall, tapping into ARNs can be advantageous for merchants, as it can help reinforce security, efficiency and trust in payment card transactions. This makes it a win-win situation which could, ultimately, forge smoother, stronger and lasting relationships between businesses and their customers.
How emerchantpay can help
ARNs might seem like a set of digits, but they can facilitate secure and trustworthy transactions. While they can help merchants prevent fraud, customers are given peace of mind and expedited dispute resolution, if necessary.
At emerchantpay, we take pride in our extensive global payment solution, which encompasses a wide range of features. This includes global acquiring, robust fraud and risk management and a host of other capabilities. Our knowledgeable team is here to offer tailored support, guiding you on how to optimise your payment processes for improved payments performance and profitability.
Ready to learn how emerchantpay can support you in increasing your payments efficiency for maximised revenue? Contact our team of payment specialists today.